European stocks opened sharply higher on Wednesday, while oil prices fell below $100 a barrel, after President Donald Trump said that the U.S. would be exiting the war in Iran within two to three weeks.
By 03:17 ET (07:17 GMT), the pan-European Stoxx 600 had spiked by 2.3%, the Dax in Germany had jumped by 2.8%, the CAC 40 in France had gained 2.2%, and the FTSE 100 in the U.K. had risen by 1.8%.
Speaking to reporters in the Oval Office on Tuesday, Trump said that the U.S. will be "leaving very soon," adding that White House’s goal of eradicating Iran’s nuclear threat had been "attained" and Washington does not need a formal deal to conclude a conflict it started in conjunction with Israel more than a month ago.
Trump argued that it will take "15-20 years" for Tehran to rebuild "what we’ve done to them."
The comments came after Defense Secretary Pete Hegseth claimed in the press briefing that the next few days of fighting would be "decisive."
Meanwhile, the United Arab Emirates is gearing up to help the U.S. and other allies to unblock the Strait of Hormuz by force after being hit by Iranian attacks on facilities in the Persian Gulf nation, according to the Wall Street Journal.
Citing Arab officials, the paper said the UAE has been lobbying for a resolution at the United Nations Security Council that would authorize such an action.
The specter of Iranian drone and missile strikes on tankers has effectively closed down the Strait of Hormuz for weeks, driving up energy prices and sparking fears over a potential surge in inflationary pressures around the world. Bets have grown that central banks could react by hiking interest rates, a prospect that has fueled increase in government bond yields, further weighing on stocks.
The Stoxx index, which dived by more than 10% from its record at one point in March, ended the month with its worst losses since June 2022. Still, benchmark bond yields in the U.S., Germany, and elsewhere dropped on Tuesday, in a possible sign of relief among anxious traders.
Trump has yet to provide an update on U.S. plans for the strait, but he has insisted that allies should "just take" the vital waterway through which roughly a fifth of the world’s oil flows.
Futures expiring in June for Brent crude, the global benchmark, had last fallen by 5.0% to $98.81 a barrel. Brent previously climbed to as high as almost $120 a barrel following the outbreak of the conflict in the Middle East, compared to around $70 a barrel before the start of the fighting in late February.
